Leonid Polezhaev, Omsk Oblast
Release Date: 2010-04-29
Leonid Polezhaev, Governor of Omsk Oblast, has been interviewed by Russiaenergy.com in the framework of a special one-off report for Oil & Gas Financial Journal on the Russian oil and gas industry. Some of the discussed topics are Mr. Polezhaev's views on the current development of Omsk Oblast as a strategic Russian oil and gas region with over 50 years of history, his appraisal of the current role of the Omsk refinery in the development of the Russian petrochemical industry, and the successful social policy of the regional government aimed at the protection of its citizens who are the main asset of stable economic and political development of the country.2011 will mark your 20th year in office as Governor of Omsk Oblast. You have obviously seen a lot of changes during this time, both in Omsk and throughout Russia. What would you say are your greatest achievements as Governor? Which projects are you most proud of and what are the main issues on the agenda of Omsk Oblast today?
Over the last 20 years, we have had to overcome the collapse of a once powerful state and the birth of new democratic ideals. I have always been true to the principle that I had once chosen: moving on slowly! This is also the name of one of my books. I must acknowledge that this principle has benefited the regional economy. Some of the most obvious examples are the privatization and conversion of the military and industrial complex. The regional government has pursued a few logical steps in order to preserve the potential of the defense industry and the technological and intellectual resources. As a result, today they are integrated in industrial holdings that are being modernized and provided with orders.
Economy is as important for the region as the protection of the social sphere. This is why I took charge of crucial transformations in the housing and public services. I have also been lobbying the increase of salaries and additional social protection for the soldiers who had returned from the Afghanistan war. We have also done all possible to preserve the Omsk Cadet Corps that has been acknowledged the best among the schools of this profile.
Sibneft left Omsk in 2005, which was a massive financial blow. However, the region is fighting back and recovering well, and the restructuring meant that Omsk was prepared to deal with the financial crisis when it arrived in 2008. Given that Sibneft no longer plays a role in the economy of Omsk Oblast, does the region need to attract oil and gas players to establish operations in the region? What would be the advantage today for such companies in basing themselves in Omsk?
I have realized in the long run that the withdrawal of Sibneft has benefited us in some way. We were forced to quicken the pace of modernization of the economy and promote a more active foreign economic policy. As a result, the volume of investments in the regional economy in 2009 did not fall against 2008. About 20 large facilities and 12 new technology lines on the existing enterprises have emerged in the region providing more than 6,000 new working places.
Expert RA, the Russian rating agency, has given A+ credit rating to Omsk Oblast in 2009 which confirms its high credibility. According to the results of some surveys of Expert RA, Omsk region has been acknowledged one of the top 10 regions of Russia in terms of investment potential over 2008–2009.
Some of the most promising investment projects are a new polypropylene and polysilicon production facility. We have signed an agreement with Centroterm Photovoltaics AG (Germany) and Titan Group for construction of a polysilicon production facility with a capacity of over 10,000 t of products annually. Production is due to be launched in 24 months. The end products will be consumed by rocket engineering industry, aviation, solar power, microelectronics. According to our estimations, the main facilities will provide 1,500 new working places which will, together with other auxiliary facilities, form the skeleton of tomorrow’s diversified regional economy.
How much of a priority is energy security for Omsk, and what strategies do you have in place to ensure it?
Obviously, new facilities require a developed power infrastructure. But today the capacity of the existing power generation facilities is exhausted and there are not enough substations to buy additional electricity on the market. This is one of our priorities. We’re partnering with InterRAO regarding this issue. One of the implemented projects in this regard is the construction of Pribrezhnaya substation.
As this is a major problem for the region and it requires drastic measures, some of the potential solutions could be to supply power from Kazakhstan. We understand that electricity needs a consumer. Unless the region develops and expands its industry, there will be no demand. We maintain the dialogue with the power engineering companies to help them find their strategic interest in cooperating with the region.
The Omsk oil refinery (ONPZ) has been massively important for the region during the last 55 years, and today it is one of the largest businesses in Omsk Oblast. How has the success of the refinery helped develop the industry throughout Siberia, and how has this added to the importance of Omsk Oblast for Russia’s overall development?
Omsk oil refinery will be turning 55 in 2010. Construction of a refinery in Western Siberia was a response to the necessity of providing fuels and lubricants for Siberia, Ural, Kazakhstan and other regions. Besides, it was also planned to create a huge petrochemical facility in Omsk Oblast in the 1950ies.
The starting capacity of the oil refinery was 3 mln t of oil per year. Initially, oil was coming from Bashkiria’s oilfields; in 1964, Tyumen’s oilfields started to supply additional fresh quantities of oil. At first the hydrocarbons were supplied with oil tankers and later on – via Ust-Balyk-Omsk pipeline. The discovery of Tyumen oilfields gave a new boost to the development of ONPZ that eventually became the flagship of Russian oil refining. By mid-70ies, the refinery’s capacity reached 24 mln t of oil with casual (in 1978 and 1980) peaks of 29 mln t.
Currently, Gazpromneft-ONPZ JSC comprises oil refineries and petrochemical facilities, auxiliary and servicing enterprises. The main products are petroleum for aviation and motor industry, diesel, petroleum bitumen, motor oils, sulfuric acid, liquefied gases. ONPZ is the only Russian producer of cracking catalysts. Its products are supplied both domestically and abroad – to Europe, Kazakhstan, Kyrgyzstan, Tajikistan. The total volume of oil refining reached 18.2 mln t in 2009.
How do you see the significance of this industry developing in the future? Will it play a larger or a smaller role in the future economic development?
Omsk refinery is to remain the major taxpayer of Omsk Oblast. Besides, its modernization requires new training programs to increase the efficiency of the personnel and the quality of their work in the region in general. Every year, about 60 – 70 % of the staff of Omsk refinery participates in training and retraining programs. The total budget allocated for training is 23 mln rubles.
The government of Omsk Oblast has established solid partner relations with the management of Gazprom Neft, the head company for the Omsk refinery. Every year, Omsk Oblast and Gazprom Neft sign a framework of agreements where Gazprom Neft takes the responsibility for its participation in financing socially important projects and programs. Besides, every year Gazprom Neft traditionally provides seasonal discounts on oil products to the farmers worth dozens of million of rubles of savings on petroleum and diesel.
Omsk Oblast and Gazprom Neft also cooperate in the framework of the social and economic development of Tara city – home of one of the oilfields owned by Gazprom Neft. A few years ago, Gazprom Neft has increased its presence in the north of Omsk Oblast which is also a source of important social support.
The Russian Federal government wants to diversify the country’s refining capability, and companies such as Tatneft are moving ahead with these plans. How will Omsk refinery stand up to this new competition?
Gradual construction of new facilities and revamp of the existing facilities have made ONPZ one of the most technologically advanced oil refineries in Russia. In terms of production volume, ONPZ ranks second in Russia and provides 8% of the total volume of oil refining in Russia and is one of the Russian leaders for motor fuel production which reached 5.2 mln t in 2009. Today, ONPZ is facing the challenge of competing with the best refineries in Europe and in the rest of the world.
Omsk is well-known for the way that the region looks after its citizens, from infrastructure investments to taking extra care of its workers in the strategic sectors. What can other regions learn from looking at Omsk’s policies in this area, and what advice would you offer to them for creating the best working atmosphere for their citizens?
The main guideline for me personally, as the head of the region, is the social well-being of the region, its comfort and social protection of its citizens. Demography speaks volumes here: 8,246 babies were born in Omsk Oblast in Jan 2009 - April 2009 which is a 200-strong increase as compared to 2008. Migration statistics also look positive: we have managed to reduce the outflow of the population. For the first time after many years, we have reached a positive migration balance in 2009.
Omsk Oblast boasts the most affordable housing prices in Siberia, the least expensive consumer basket and the biggest employment potential. Thanks to implementing targeted social programs, today Omsk Oblast is showing the lowest registered unemployment rate. This is a very important characteristic: it means that our anti-crisis program really works.
Mr. Polezhaev, what would be your final message to the international audience of Oil and Gas Financial Journal?
I believe that most people living in Omsk Oblast are confident that Russia will overcome the global financial crisis and will become a more strong and competitive country.
| Company: | Omsk Oblast |
| Position: | Governor and Chairman |
| Country: | Russian Federation |